2 The functions of marketing add value to a product UtilityThe functions of marketing add value to a productThe added value is called UtilityUtilities are the attributes of a product or service that make it capable of satisfying consumer’s wants and needsThere are 5 utilities involved with all productsFormTimePlacePossessionInformation
3 Form UtilityInvolves changing raw material or putting parts together to make them more useful.Form Utility deals with making or producing goods and services to meet customer needs.
4 An Example of Form Utility A TreeIn its original state it has value as an object of beauty, supplies oxygen, prevents soil erosion, and provides a home for animals.When a tree is cut down and used in making other products its usefulness changes. The raw material becomes part of a new product that has a different valueForm Utility takes place also when a manufacturer assembles parts into a product pieces of wood assembled into furniture
5 Place Utility Having a product where customers can buy it Businesses study consumer shopping habits to determine the best sales outlets for their productsOutlets include catalogs, the internet, retail stores
6 Time UtilityHaving the product available at a certain time of the year or a convenient time of dayThe value of the product is increased by having it available when consumers want themTime Utility requires the marketer to plan ahead in order to have the right product at the right timeToy companies introduce new toys for Christmas every February at the Toy Fair in New York City
7 Possession Utility The exchange of a product for some monetary value Alternatives to cash may be accepted these include:In business to business situations companies also grant customers creditCredit CardsChecksInstallment PlansLayawayPossession Utility is involved every time legal ownership of a product changes hands
8 Information Utility Involves communication with the consumer Examples of sources of information:Sales AssociatesPackagingTags and LabelsAdvertisingOwner’s ManualsInternet SitesTelephone Customer Service
9 Benefits of Product Utility Added value increases demand, increased demand allows manufacturers to produce in larger quantities which reduces the cost of each itemWhen a product becomes popular the number of merchants offering the product will increase, this increases competition which reduces the priceCompetition also makes manufacturers improve products to better satisfy customer wants and needs